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Banca March - Crecemos con valores, crecemos juntosNews

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At Banca March, we want to keep you always informed, and this section gives you the opportunity to find out whatever you want to know about.

11/23/2017

Third quarter 2017 results

The Banca March Group doubles the profit from its banking activity, achieving a consolidated profit of €157.7 million up to September

  • Purely banking activity doubled its profit in the first nine months of the 2017–2019 Strategic plan, reaching €67.8 million. 
  • The increases were particularly significant in off-balance-sheet funds, with an increase of 18.1%, and in revenue from services, with growth of 31.0%.
  • Banca March’s business model has been strengthened by solid financial and capital ratios: the institution has the lowest non-performing asset ratio in the sector in Spain (3.46%) and one of the highest levels of solvency (18.9%) and liquidity (114.8%) in Europe. Moody’s acknowledged this solidity and upgraded the institution’s long-term rating to A3, the highest rating in the Spanish domestic financial system.  
  • Customers are once again showing a high level of confidence in the institution, as reflected by the benchmark studies conducted by the independent
    firm Stiga, ranking Banca March second in the sector with a score of 8 out 10 for Overall Satisfaction with the Institution and a Net Promoter Score (NPS) recommendation index of 26.7%. · Private and High-Net-Worth Banking experienced double-digit increases for all activity parameters: business volume (+13.4%), number of customers (+18.7%) and off-balance-sheet funds (+15.9%).  
  • The Corporate Banking area reinforced its leadership, becoming the institution of reference for financing alternatives for companies, family-owned businesses and business families. In 2017, Banca March has consolidated itself as the main coordinating entity of promissory note programs for the Alternative Fixed-Income Market (MARF), with a market quota exceeding 50%.

During the first nine months of 2017, the Banca March Group’s net profit totalled €157.7 million, representing a 97.1% increase with regard to the same period in the previous year. The consolidated results include the capital gains obtained through Corporación Financiera Alba—where Banca March holds a 20.02% interest—with the sale of the all its shares in ACS.

The results attributable to banking activity have continued to develop strongly and dynamically: during the first nine months of the 2017–2019 Strategic Plan they multiplied 2.2 times with regard to the same period in 2016, reaching €67.8 million.

During the first nine months of the current financial year, revenue from service provision grew by 31.0%; off-balance-funds by 18.1%; and the total business volume of the bank as a whole rose by 7.2%. By the end of September, Banca March’s total net assets as an individual bank were around €1.0716 billion.

GROWTH IN ALL MARGINS AND SPECIALIST AREA

All business margins saw significant increases. Particularly noteworthy was the 31.0% growth in revenue for service provision, coming mainly from investment fund management and SICAV, Capital and Treasury Market activities and the distribution of insurance policies and payment methods. In fact, the contribution of this revenue to the ordinary margin of banking activity is increasing, having reached 67.2% by September 2017: a clear reflection of Banca March’s strategy to specialise in Private and High-Net-Worth Banking and Business Consultancy.

STRONG GROWTH IN BANKING ACTIVITY

José Luis Acea, CEO of Banca March, said: “The results achieved in the first nine months of this year go beyond the objectives for the period set out in the 2017–2019 Strategic Plan, which are already very ambitious. This Plan marks a major transformation for the institution, with sights set on consolidating ourselves as a benchmark institution in Private and High-Net-Worth Banking and Business Consultancy. Against a backdrop of low interest rates, and in the midst of the profound changes being experienced by the sector, such as the increase in regulation and intense competitive pressure, Banca March is finding an opportunity to provide superior added value to current customers and those who come to us, thanks to which more and more savers are placing their trust in our institution”.

SOLVENCY

True to its philosophy of prudent long-term management, Banca March’s business model continues to be supported by solid financial parameters: by the end of September its solvency ratio reached 18.9%, one of the highest in Europe; its non-performing loans ratio stood at only 3.46%, the lowest in Spain, with a very notable difference compared to the sector average; and its liquidity ratio reached 114.8% at the close of September.

The strength of Banca March’s credit profile, in terms of capital requirements, as well as the quality of the assets on its balance sheet and Banca March’s broad and extensive capacity to cover its customers’ financial requirements, were acknowledged by credit rating agency Moody’s, which in May updated Banca March’s long-term debt rating to A3 with a stable outlook. Banca March therefore has the highest rating in the Spanish financial system, above the rating of the Kingdom of Spain (currently Baa2). According to the system used by Moody’s, Banca March’s rating can only improve if Spain’s does. The rating for Banca March‘s short-term deposits remains at P2.

A BENCHMARK IN PRIVATE AND HIGH-NET-WORTH BANKING

Private and High-Net-Worth Banking—the main focus of Banca March’s Strategic Plan and a sector in which it aims to become the main benchmark institution in the Spanish market—recorded a strong boost during the first nine months of 2017, surpassing the objectives the institution had set itself. The number of customers in this segment was up 18.7% with regard to the same period in 2016; the institution’s business volume increased by 13.4%; and off-balance-sheet funds grew by 15.9%. All the parameters therefore show percentage growth in the double digits.

  One of the must telling signs of customers’ confidence in the Banca March Group’s Private and High-Net-Worth Banking services is the favourable evolution of the total SICAV assets managed by March Asset Management, which reached €3.415 billion by the end of September. This figure ranks second in the Spanish market by SICAV volume.

March A.M., whose global assets at the end of September amounted to €7.339 billion, is a key piece in the Group’s strategy. The asset management company has increased the assets under its management by nearly €1 billion during the first nine months of the year. The excellent profitability obtained by the fund management team and its consistency in the long term are behind the confidence investors place in March A.M.’s products every day. Additionally, an agreement has recently been reached with the MFEX fund platform for the distribution of the products from the Luxembourgian SICAV March International in over 30 countries, once again demonstrating the institution’s capacity to offer its customers and potential customers differential services and products with added value.

EXECUTION OF THE STRATEGIC PLAN

The results obtained during the first nine months of this year exceed the objectives set in Banca March’s 2017–2019 Strategic Plan, the goal of which is to reinforce Banca March as a benchmark institution in the specialised businesses it focuses on—Private and High-Net-Worth Banking and Business Consultancy—together with increased profitability in all areas of activity.

As a result of this specialisation, the 2017–2019 Strategic Plan envisages increases of 50% by 2019 in off-balance-sheet funds, revenue from the provision of services and Private and High-Net-Worth Banking customers.

SATISFIED, LOYAL CUSTOMERS

Service quality is one of Banca March’s cornerstones, which is why the institution uses a comprehensive system to monitor customer opinion, based on the highest market standards and exhaustive monitoring to seek to constantly improve the service. According to the Financial Sector Customer Satisfaction Benchmarking published for the Spanish market by the independent firm Stiga, the most recent data show that Banca March achieves very high levels in terms of customer satisfaction. Specifically, this study has the institution in second place, both for Overall Satisfaction with the Institution, with a score of 8 out of 10, and for the customer recommendation index, measured using the method known as NPS (Net Promoter© Score), which stood at 26.7% for the bank as a whole in September.

UNIQUE OFFER OF COLLECTIVE INVESTMENT WITH CUSTOMERS

The institution continues to strengthen itself and is firmly committed to its offer of collective investment, which allows our customers to invest in the same products as the bank, a unique concept that sets us apart in the Spanish financial market. The three institutional SICAVs managed by March Asset Management (March A.M.) are a good example of collective investment. Torrenova is the most important SICAV in Spain, with €1.54 billion in assets under management. It was created over 20 years ago as an investment instrument for the bank’s shareholders and currently comprises 6,689 customers. Bellver (551 million euros’ worth of managed assets) and Lluc (226 million) round off this group of products. All three cases are examples of a unique SICAV model, which any of our customers can access with a minimum investment of just one share, thus benefiting from the yield produced by these financial instruments in the same way.

Customers also have the opportunity to participate in other forms of collective investment with Banca March through different alternatives on offer in the real estate sector, special funds and business projects, among others. In recent years, Banca March’s customers have participated in projects that are diverse in nature. One example is Deyá Capital, a fund managed by Artá Capital, a capital development manager for the Banca March Group, which invests in non-listed, medium-sized companies in Spain and Portugal.

Customers have also been able to invest in debt funds, such as Oquendo Mezzanine II, which facilitates alternative long-term preference capital financing for small and medium-sized companies, also in the Iberian Peninsula. Another collective investment opportunity offered was in Madrileña Red de Gas, a company that operates gas distribution grids, an operation that closed with an IRR of 21% between 2011 and 2015. Similarly, the investment in a BBVA property sale & lease back project closed with an average IRR of 17.6% between 2009 and 2014.

Banca March recently reached an agreement for the purchase of the ABC Serrano Shopping Centre from CBRE Global Investment Partners in association with IBA Capital Partners, with the goal of helping its customers get involved in the investment.

EXCELLENT STAFF

100% of Banca March’s employees participate in a training programme on financial advice and information, meaning the institution exceeds the MiFID guidelines published by the European Securities and Markets Authority (ESMA). Based on this plan, the institution offers training not only to those who directly advise clients, but also to those who provide information and marketing services and to staff working in the bank’s technical and administrative areas. The rate of professional certifications continues to increase, with an 80% pass rate in the most recent exams to obtain EFPA Spain’s EFA (European Financial Advisor) and EIP (European Investment Practitioner) qualifications.

The initiative aims to ensure that Banca March’s staff are as highly qualified as possible, and is directly based on the four pillars of the bank’s business model: commitment to shareholders, unique and exclusive products and services, superior quality of service and excellent staff.

The bank has been providing training on financial consultancy and information for a number of years, which since 2016 has been on a more comprehensive basis. It is one of the factors that has made the bank a leader in the sector in terms of service quality, as perceived by its customers.

CORPORATE BANKING: ALTERNATIVE SERVICES WITH NO CONFLICT OF INTERESTS

In addition to traditional banking services (financing, collection and payment settlement, comex, etc.), Banca March’s Corporate Banking area, with a particular focus on companies, family-owned businesses and business families, also offers customers a broad range of consultancy products with increased added value that clearly sets us apart from the competition. The range includes: balance sheet disintermediation, mergers and acquisitions, direct lending, customised treasury solutions and risk hedging.

This is a specialised offer that is one of a kind in Spain, and the institution is firmly committed to providing our client companies with alternative forms of financing, which they can access with the support of a dynamic family bank and the guarantee of no conflicts of interest, another of our characteristics most appreciated by the market. Banca March is the current leader in key businesses in this activity, such as, for example, in the promissory note market in the Alternative Fixed-Income Market (MARF). As an underwriting entity, Banca March’s market share currently exceeds 50%, having worked with such prestigious issuers as Gestamp, Elecnor, Barceló, Tubacex, Europac, Maxam and Fortia Energía.

TECHNOLOGICAL COMMITMENT

In its commitment to offering its customers the best possible service, Banca March seeks to be at the forefront of technology. To do this, the institution has doubled investment in technology, with significant results and important actions under way to meet both the internal and external demands of a modern, dynamic, multi-connected bank.

All its account managers currently have the means required to perform any operation with customers without the need to physically be in the office. It has also embarked on a plan to transform its offices into Business Centres focusing on consultancy and boosting the use of multiple channels to facilitate all the banking operations required and demanded by customers. Banca March also has its subsidiary Inversis, a leading platform for the provision of technological services.

Banca March’s digital transformation process has been recognised this year, obtaining one of the Computing Awards of the Digital Era, specifically in the ‘Processes and Fulfilment’ category.    

Banca March

DATA ON BANKING ACTIVITY 30/09/2017 30/09/2016 Variation
Amount %
Customer bank funds 10,276.4 9,335.0 941.3 10.1%
Off-balance-sheet funds 11,411.0 9,664.0 1,747.0 18.1%
Loans to customers 8,009.9 6,902.3 1,107.5 16.0%
BALANCE DETAILS 30/09/2017 30/09/2016 Variation
Amount %
Net Equity 4,874.6 4,291.7 582.9 13.6%
Totalassets 18,255.6 16,436.3 1,819.3 11.1%
PROFIT AND LOSS ACCOUNT DETAILS 30/09/2017 30/09/2016 Variation
Amount %
Interest margin 113.3 125.2 -11.9 -9.5%
Revenue for services 150.0 114.5 35.5 31.0%
Allocated result 157.7 80.0 77.7 97.1%

KEY RATIOS

Default 30/09/2017 30/09/2016
Non-performing loan ratio 3.46% 3.56%
Coverage ratio(*) 50.88% 83.96%
CAPITAL 30/09/2017
Solvency ratio 18.9%
Tier 1 18.6%

(*) The drop in the coverage ratio complies with the application of the new accounting regulations concerning provisions established by Annex IX of Bank of Spain Circular 4/2016

Amount in millions €

Third quarter 2017 results

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